Ghana’s Inflation Rate Declines to 23.1% in February 2025

In February 2025, Ghana’s inflation rate decreased by 0.4 percentage points to 23.1%. This marks the second consecutive month of disinflation. Food inflation remains a significant driver, with notable increases observed in local food items. Additionally, year-on-year food inflation has decreased for the first time in five months, indicating a shift in inflationary pressures.

In February 2025, Ghana’s inflation rate has decreased by 0.4 percentage points, reaching 23.1% year-on-year, as reported by the Ghana Statistical Service (GSS). This is a slight reduction from January’s rate of 23.5%. Both year-on-year and month-on-month inflation recordings have exhibited disinflation for the second consecutive month, reflecting a modest trend despite remaining the third highest in the past ten months, equating to the rate recorded in May 2024.

The overall month-on-month inflation has seen a decline for three consecutive months, significantly reducing from the 2.6% inflation observed in November 2024. Three categories—Food and Non-Alcoholic Beverages (28.1%), Alcoholic Beverages, Tobacco and Narcotics (25.6%), and Housing, Water, Electricity, Gas, and Other Fuels (24.3%)—reported inflation rates surpassing the overall rate of 23.1%. In contrast, only the food items division presented a month-on-month inflation rate that exceeded the overall inflation rate.

The principal contributors to food inflation emerge from vegetables, tubers, and plantains, accounting for 4.3 percentage points of the annual food inflation rate and 0.2 percentage points of the monthly inflation rate. The dominance of vegetables and tubers is evident, as their annual inflation rate stands at 45.5%. The GSS clarifies the gap between food inflation (28.1%) and non-food inflation (18.8%) at 9.3 percentage points, with food inflation marginally increasing in February 2025.

Moreover, month-on-month food inflation is higher than non-food inflation by 0.7 percentage points, with locally produced items experiencing an inflation rate of 25.1%, significantly above the 18.5% for imported goods. Notably, for the first time in five months, year-on-year food inflation has decreased, indicating a potential shift in the inflationary pressures affecting the economy while non-food inflation has steadily decelerated for the fifth consecutive month, albeit marginally.

In summary, Ghana’s inflation rate for February 2025 has seen a modest decline, reaching 23.1%, reflecting a decreasing trend for two months consecutively. The reduction continues to highlight the main drivers of inflation within various sectors, notably food, which has shown both year-on-year and month-on-month variations. The distinction between local and imported inflation rates adds further insight into the underlying economic dynamics of the country.

Original Source: www.ghanabusinessnews.com